The Business/Finance/Economics Thread | Vital Football

The Business/Finance/Economics Thread

BodyButter

Vital Football Legend
#1
I know a few of us are interested in economics and the like so hopefully this thread will be interesting.

I've been reading up on the WeWork non-IPO. It's amazing stuff and probably the beginning of the end of the second tech bubble.

In August, they wanted to list at a valuation of around $50bn. They then revised that to $24bn and then $10bn before pulling the plug on the IPO. There is all kinds of wrong with WeWork including the now former CEO selling off $700m of stock before the IPO (that didn't happen) and the company losing $2bn last year.

As usual, the people bank rolling these enormous losses are the Japanese bank Softbank. Softbank are the money behind Uber which lost only $1.6bn last year, down from $2.2bn in 2017.

I'd imagine that any tech company looking for investment is going to find the market very cold for a while.
 

BodyButter

Vital Football Legend
#2
I've just discovered that Softbank's money is from....

Do, do, do

Those bastions of financial prudence, Saudi Arabia!

Softbank has a $100bn 'Vision Fund' of which they have sank at least $10bn into WeWork and probably a lot more into Uber.
 

BodyButter

Vital Football Legend
#3
This is amazing. In 2016, they laid off 7% of their workforce. God knows why because they still lost hundreds of millions of dollars but anyway. In the meeting to explain why this was a good thing, the CEO had trays of tequila shots brought in to help soften the news. Then Run DMC arrived to play It's Tricky so the staff could get drunk and dance to celebrate the success of laying off 7% of their workforce and then blow all of the money saved on tequila and 80's rappers.
 

CDX_EIRE

Vital Football Hero
#5
Its almost like some of the companies are going for the too big to fail model.

WeWork own an enormous amount of property too so they have assets so I am not sure its that bad for them. And of course Uber want out, spending $50MM a year on lobbying to prevent states flipping their 'contractors' to full time employees.

I've read these overpriced IPOs are usually a prelude to a recession.
 

BodyButter

Vital Football Legend
#6
Its almost like some of the companies are going for the too big to fail model.

WeWork own an enormous amount of property too so they have assets so I am not sure its that bad for them. And of course Uber want out, spending $50MM a year on lobbying to prevent states flipping their 'contractors' to full time employees.

I've read these overpriced IPOs are usually a prelude to a recession.
They don't own any of the property. The rent it on 15 year leases and then sub-rent it to other companies. The former CEO actually owns some of the buildings that WeWork rents.
 

danvilla2

Vital Football Legend
#7
This is amazing. In 2016, they laid off 7% of their workforce. God knows why because they still lost hundreds of millions of dollars but anyway. In the meeting to explain why this was a good thing, the CEO had trays of tequila shots brought in to help soften the news. Then Run DMC arrived to play It's Tricky so the staff could get drunk and dance to celebrate the success of laying off 7% of their workforce and then blow all of the money saved on tequila and 80's rappers.
What a way to go though. Definitely better than the one time I was made redundant where we spoke about how much they’d pay me and negotiating how much gardening leave I could get.
 

BodyButter

Vital Football Legend
#10
What a way to go though. Definitely better than the one time I was made redundant where we spoke about how much they’d pay me and negotiating how much gardening leave I could get.
The oiks who got sacked didn't get invited to the party, or at least that's my understanding of it.
 

BodyButter

Vital Football Legend
#11
Talking of IPO’s, there’s a huge slowdown around the world.

Selfishly I’m looking forward to a significant correction in the stock market soon so I can stick some cash away rather than hold it in a 1.5% bond or whatever the crap rate is at the moment

https://www.hl.co.uk/news/2019/10/8/uk-listings-tumble-to-10-year-low-in-third-quarter?cid=halDM90417&bid=361822479&e_cti=6713090&e_ct=T&utm_source=AdobeCampaign&utm_medium=email&utm_campaign=EONRM_Weekly newsroom_rebrand_Day_test_1_Content_11.10.2019&theSource=EONRM&Override=1
I don't know enough about the stock market. I'm getting to the end of the expenses for the new house and starting to build a bit of a reserve again. I've been thinking about property maybe once it gets to the bottom of the cycle here. Either that or mutual funds (since I don't know anything about the stock market). Are there types of stocks which do badly at the start of a recession and then recover?
 

danvilla2

Vital Football Legend
#12
I don't know enough about the stock market. I'm getting to the end of the expenses for the new house and starting to build a bit of a reserve again. I've been thinking about property maybe once it gets to the bottom of the cycle here. Either that or mutual funds (since I don't know anything about the stock market). Are there types of stocks which do badly at the start of a recession and then recover?
I’m personally never going to beat the market on a stock by stock basis so I invest in low cost index tracker funds. You get the ups and downs typically in line with whatever the fund tracks eg UK index fund will track the FTSE 100 or all share. If you can hold out and buy during the cycles when the stock market is cheap you’re giving yourself more chance of cashing in on the upside but you miss out on the returns in the meantime.

iShares emerging markets is a good one I like ??
 

CDX_EIRE

Vital Football Hero
#13
I’m personally never going to beat the market on a stock by stock basis so I invest in low cost index tracker funds.
Is timing the market just not a load of bollocks anyway? Like it'll be pure luck from what I've read especially if you do it perfectly and forgive me too because I've only switched on the financial side of my brain since I turned 30 (I am still 30).

My reading and listening to podcasts suggests dollar cost averaging is the better way to go. Just consistently invest a portion of your funds each week/month - all the examples I've seen always show the person who times the market still ends up with less than the person who invests over time.

Are you lads into personal finance? Thats really where I am starting having blown my 6 figure salary on trips for the past 3 years.
 

BodyButter

Vital Football Legend
#14
Is timing the market just not a load of bollocks anyway? Like it'll be pure luck from what I've read especially if you do it perfectly and forgive me too because I've only switched on the financial side of my brain since I turned 30 (I am still 30).

My reading and listening to podcasts suggests dollar cost averaging is the better way to go. Just consistently invest a portion of your funds each week/month - all the examples I've seen always show the person who times the market still ends up with less than the person who invests over time.

Are you lads into personal finance? Thats really where I am starting having blown my 6 figure salary on trips for the past 3 years.
I have a tiny private pension fund that I put into every year. I only do that maximum that's tax free. I had managed to save up a decent amount that was sitting in my current account but I spent it all on the down payment, legal fees, renovations and furniture for the house. Only starting to look into it again now. I'm wondering if I'd be better off investing in property or mutual funds. I'll stay away from metals after getting my fingers burned in the last silver boom.

My old mate Dave Ramsey reckons growth stock mutual funds are the way to go. He is a fan of DCA. He reckons you just keep your head down and keep putting money in come rain or shine.

Property feels a bit more tangible but then you can have issues with renters and all that.
 

danvilla2

Vital Football Legend
#15
I recommend Hargreaves Lansdown if you’re able to from your locations. I have a stocks and share ISA, SIPP (personal pension), fund account (shares, not tax efficient) and a savings account. On the savings account they offer different length of bonds at those random banks you get but all covered by FSCS. They did have one which you could withdraw at any time with around a 1.5% interest rate the other day when I looked.

Set up a direct debit each month and either build up the cash or choose how to buy your stocks or funds.

Property vs Stocks - property in the UK had its boom in the 90’s, I can’t see growth like that without a correction first. Banks are lending 4-5x salary, so is already maxed out in my opinion. Don’t be afraid of stocks, as long as you diversify. Depending on the stock you’ll be getting a decent return each year on average (higher risk, higher reward), reinvest those earnings and the compounded gains multiply even further.

Or by Bitcoin if you’re Tubbz ?
 
#16
Yep, HL are great, if you know which funds you want.

My advice is to pick your sectors first, depending on you risk profile. Bonds and Property are usually lower risk, and Global Equities at the higher end. Then choose funds in these sectors based on consistency, not recent performance. Try and find ones that in the second quartile over 1, 3 and 5 years. The more, the better, because diversifying also reduces risk.

There are no guarantees, and you'll have some bad years, but overall it is the best way to make money in the long term.

If you need the money in the short term, don't do it!!!!!
 

OVB

Vital Squad Member
#17
I make a reasonable amount of money on the stock market in my spare time which I have plenty of. Quick tip for vital villans. A company called VAST resources. Likely to be up to 1p a share by Christmas and then onwards. Not guaranteed but I got into this at 0.12 a share (now 0.44) Check it out on the LSE site. Very likely to break through the 0.5 barrier Monday
 

BringbakMON

Vital 1st Team Regular
#18
HL are very clear and simple to use with a good selection of funds available (altho generally best to take their sales pitch ie Wealth 50 or whatever they call it these days with a large pinch of salt.) but they are one of the most expensive platforms to use if holding mainly funds. (II, Iweb and a few other are much cheaper)

'Timing the market' is exactly what you want to do and will give max returns - only prob is you can't do it so just dump in lump sums or feed in regularly as and when
(time in the market as they say)

Low costs trackers do a decent job (depending what your tracking) and make a lot of sense if you want a sort of fire and forget approach. Plenty available.
 

OVB

Vital Squad Member
#19
HL are very clear and simple to use with a good selection of funds available (altho generally best to take their sales pitch ie Wealth 50 or whatever they call it these days with a large pinch of salt.) but they are one of the most expensive platforms to use if holding mainly funds. (II, Iweb and a few other are much cheaper)

'Timing the market' is exactly what you want to do and will give max returns - only prob is you can't do it so just dump in lump sums or feed in regularly as and when
(time in the market as they say)

Low costs trackers do a decent job (depending what your tracking) and make a lot of sense if you want a sort of fire and forget approach. Plenty available.
I use and would recommend Jarvis and the
XO platform